A. Extensions to File:
(1) An extension to file is not an extension to pay and estimated taxes are due by the tax return filing deadline to avoid non-payment penalties and/or interest.
(2) If the taxpayer attaches a copy of a timely filed Federal extension to file to their complete City tax return, no late-filing penalty shall be charged in those cases in which a complete City tax return is filed within the period as extended.
(3) Taxpayers not filing a Federal extension to file who wish to file only an extension to file with the City may do so using the Application for Extension of Time to File Tax Return form available at the Income Tax Division office or on the City's website. To be considered, such requests must be postmarked or in our offices on or before the tax return filing deadline. The request for extension of time to file with the City may be denied if the individual taxpayer:
(a) Fails to timely file the request.
(4) If a Federal extension or a City extension to file has been approved, the City tax return shall be due on the fifteenth (15th) day of the tenth (10th) month following the previous taxable year and no late-filing penalty shall be charged if a complete New Carlisle income tax return (including all required informational returns, schedules and statements needed to support the tax return along with a copy of the timely filed Federal or City extension to file) are filed within the extension period.
(5) Businesses may also submit extension to file requests via the Ohio Business Gateway.
B. Net Operating Loss Carryforwards
(1) Tax preparers should review ORC 718 for more information on net operating loss carryforwards as they relate to business filings.
(2) Net operating losses cannot be used to offset qualifying city taxable wages.
(3) For taxable years beginning 2018, 2019, 2020, 2021, and 2022, a taxpayer may deduct no more than fifty per cent (50%) of the amount of the net operating losses carried forward for tax year beginning 2017 or thereafter.
(4) For taxable years beginning 2023 or thereafter, a taxpayer may deduct the full amount of any net operating losses available.
(5) The amount of net operating loss shall be deducted from net profit that is reduced by exempt income to the extent necessary to reduce City taxable income to zero with any remaining unused portion of the net operating loss carried forward to not more than five (5) consecutive taxable years following the taxable year in which the loss was incurred, but in no case for more years than necessary for the deduction to be fully utilized.
C. Income apportionment:
Taxpayers engaged in a business or profession in the City should review ORC 718.02 for apportionment factors. If the apportionment factors described in ORC 718.02 do not fairly represent the extent of a taxpayer's business activity in a municipal corporation, the taxpayer may request, or the tax administrator of the municipal corporation may require, that the taxpayer use, with respect to all or any portion of the income of the taxpayer, one of the alternate apportionment methods described in ORC 718.02.
D. Rounding of amounts
A person may round to the nearest whole dollar all amounts the person is required to enter on any return, report, voucher, or other document required under this chapter. Any fractional part of a dollar that equals or exceeds fifty cents ($0.50) shall be rounded to the next whole dollar, and any fractional part of a dollar that is less than fifty cents ($0.50) shall be dropped. If a person chooses to round amounts entered on a document, the person shall round all amounts entered on the document.
E. Interest and penalties for late filing and payment of direct tax liability, in accordance with Ordinance Section 881.08:
(1) This section does not apply to returns required to be filed or payments to be made through tax year 2015, regardless of the filing or payment date. Returns required to be filed or payments to be made through tax year 2015 but filed or paid after that date shall be subject to the ordinances and/or rules, as adopted prior to January 1, 2016.
(2) Interest: Except as provided in paragraphs (4) and (5) below all taxes imposed under the provisions of the Ordinance and the New Carlisle Income Tax Rules and Regulations that remain unpaid after they have become due shall bear interest, in addition to the amount of the unpaid taxes and penalties. Interest shall be imposed at the rate of the Federal short-term rate (rounded to the nearest whole number percent) for July of the current year plus five percent (5%) for each month (or part thereof) there is a tax balance due. This rate shall apply for the calendar year next following the July of the year in which the federal short-term rate is determined. Interest is imposed on only the unpaid tax portion of any balances due and is imposed at the time of filing and each month after filing at the beginning of the month.
(3) Penalties: In addition to interest as provided in paragraph (2) of this Article, penalties based on the unfiled returns and/or unpaid taxes are hereby imposed as follows:
(a) Non-Filing Penalty: For failure to file a complete City tax return, together with all appropriate supporting Federal schedules, when due: twenty-five dollars ($25.00) per month (or part thereof), not to exceed one hundred fifty dollars ($150.00) for each tax year.
(b) Non-Payment Penalty: For failure to remit the taxes due at the time of filing the City tax return: fifteen percent (15%) of the tax not timely paid.
(4) Exceptions:
(a) No penalty shall be charged on additional taxes found on review to be due when a return was timely filed in good faith and the tax paid thereon within fifteen (15) days from the date the taxpayer was notified of such findings.
(b) In the absence of fraud neither interest nor penalty shall be charged on any additional taxes resulting from a Federal Audit for income tax purposes provided an amended return is filed and the additional tax paid within three (3) months after final determination of the Federal tax liability.
(5) Minimum Charges: Interest and penalty charges shall not be levied when the total of such charges amounts to less than ten dollars ($10.00). Additional interest calculated monthly on the tax balance due will not be levied when the total of such additional charges amounts to less than ten dollars ($10.00).
(6) Effect on Extensions:
(a) No non-filing penalty will be charged if a tax return is filed and a balance due is paid within the extended period for filing that return when such extension was authorized by the Administrator as provided in these Rules and Regulations or if a timely filed Federal extension is provided with the tax filing.
(b) Non-filing penalty will be charged from the date the return was due when the return is not filed within the approved extended period.
(c) Non-payment penalty will be charged on tax not paid by the return filing deadline even though the time for filing the return has been extended.
F. Declaration -- Requirement of filing:
(1) Every taxpayer shall make a declaration of estimated taxes for the current taxable year, on either their New Carlisle income tax return for the prior tax year or on the declaration form available on the website (www.newcarlisle.net) or at the Tax Division, if the amount payable as estimated taxes is at least two hundred dollars ($200). The declaration of estimated taxes shall be filed on or before the date prescribed for filing a City tax return or on or before the fifteenth (15th) day of the fourth (4th) month after the taxpayer becomes subject to tax for the first time. Amended declarations may be filed at any time using the declaration form available on the website or at the Tax Division. The unpaid balance due on the amended declaration shall be paid in equal installments on or before the remaining payment dates.
(2) The filing of a declaration does not relieve the taxpayer of the necessity of filing a final return even though there is no change in the declared tax liability. A final return must be filed to obtain a refund of any overpayment of at least ten dollars ($10.00) or more.
(3) On joint accounts, joint declarations are required.
G. Required dates for estimated payments and penalties for underpayment of estimated taxes:
(1) The required portion of the tax liability for the taxable year that shall be paid through estimated taxes made payable to the City, including the application of credit carryforwards and withholding credits on or before the applicable payment date, shall be as follows:
• On or before the fifteenth (15th) day of the fourth (4th) month after the beginning of the taxable year, twenty-two and one-half percent (22.5%) of the tax liability for the taxable year.
• On or before the fifteenth (15th) day of the sixth (6th) month after the beginning of the taxable year, forty-five percent (45%) of the tax liability for the taxable year.
• On or before the fifteenth (15th) day of the ninth (9th) month after the beginning of the taxable year, sixty-seven and one-half percent (67.5%) of the tax liability for the taxable year.
• For an individual: On or before the fifteenth day (15th) day of the first (1st) month of the following taxable year, ninety percent (90%) of the tax liability for the taxable year.
• For a person other than an individual: On or before the fifteenth (15th) day of the twelfth month of the taxable year, ninety percent (90%) of the tax liability for the taxable year.
Note: Section G was amended to comply with modified ORC 718.08 (HB 49) pertaining to a change in the due date for the fourth quarter estimated tax payment for individuals from the 15th day of the twelfth month to the 15th day of the first month of the following taxable year effective beginning tax year 2018.
(2) When an amended declaration has been filed, the unpaid balance shown due on the amended declaration shall be paid in equal installments on or before the remaining payment dates.
(3) On or before the fifteenth (15th) day of the fourth (4th) month of the year following that for which the declaration or amended declaration was filed, an annual return shall be filed and any balance which may be due shall be paid in accordance with ORC 718.05.
(4) In the case of any underpayment of any portion of the tax liability, penalty for underpayment of estimated taxes will be imposed. The amount of the underpayment shall be determined as follows:
• For the first (1st) payment of estimated taxes each year, twenty-two and one-half percent (22.5%) of the tax liability, less the amount of taxes paid by the date prescribed for that payment.
• For the second (2nd) payment of estimated taxes each year, forty-five percent (45%) of the tax liability, less the amount of taxes paid by the date prescribed for that payment.
• For the third (3rd) payment of the estimated taxes each year, sixty-seven and one-half percent (67.5%) of the tax liability, less the amount of taxes paid by the date prescribed for that payment.
• For the fourth (4th) payment of the estimated taxes per year, ninety percent (90%) of the tax liability, less the amount of taxes paid by the date prescribed for that payment.
(5) The period of the underpayment shall run from the day the estimated payment was required to be made to the date on which the payment is made. For purposes of this section, a payment of estimated taxes on or before any payment date shall be considered a payment of the previous underpayment only to the extent that payment of estimated taxes exceeds the amount of payment presently required to be paid to avoid any penalty.
(6) The penalty for underpayment of estimated taxes is fifteen percent (15%) of the amount not timely paid for each required estimated payment date.
(7) An underpayment of estimated tax penalty will not be applied if:
• For an individual: The amount of estimated taxes paid by the fifteenth (15th) day of the first (1st) month of the following taxable year equals at least ninety percent (90%) of the tax liability for the current taxable year.
• For a person other than an individual: The amount of estimated taxes paid by the fifteenth (15th) day of the first (1st) month of the following taxable year equals at least one hundred percent (100%) of the tax liability shown on the New Carlisle tax return for the preceding taxable year (provided that the immediately preceding taxable year reflected a period of twelve (12) months and a New Carlisle tax return was filed for the preceding year).
• The taxpayer is an individual who resides in the City but was not domiciled here on the first (1st) day of January of the calendar year that includes the first day of the taxable year.
H. Delinquent Process for Direct Accounts
(1) Non-Filing:
(a) If a complete tax return has not been filed by the due date of an extended return for that year, Non-Filing Notices will be mailed to the taxpayer's address on file at the Income Tax Division.
(b) If the taxpayer fails to provide acceptable documentation stating why a tax return is not required for that tax year or does not file a tax return after repeated mailings of the Non-Filing Notice, a Final Non-Filing Notice will be mailed to the taxpayer's address on file at the Income Tax Division.
(c) If the taxpayer fails to provide acceptable documentation stating why a tax return is not required for the tax year or does not file a tax return within 30 days after the Final Non-Filing Notice was mailed, a summons to the Clark County Municipal Court for a criminal misdemeanor may be issued. Once a court summons has been issued, the summons will not be dismissed unless the taxpayer can provide proof of non-residency in compliance with Ohio Revised Code Chapter 718 or written proof that no business was conducted within the City.
(2) Non-Payment:
(a) If a tax return is reviewed and changed by the Income Tax Division, the taxpayer will receive a Tax Return Change Notice from the Income Tax Division. The taxpayer may contact the Income Tax Division to discuss the return and may provide additional written documentation relating to the return for the review by the Tax Administrator for possible modification of the filed tax return. A change or correction of a tax return or a request for missing information is not an Assessment.
(b) If the taxpayer has an unpaid tax or interest/penalty balance, the taxpayer will receive Monthly Statements from the Income Tax Division at the beginning of the month following the return filing (Note: This may be later during the months of April and May). The taxpayer may contact the Income Tax Division to discuss the balance due and may provide additional written documentation related to the return for the review by the Tax Administrator for possible modification of the filed tax return and/or the taxpayer may request in writing an appealable Assessment of any balance due. The appealable Assessment will be sent to the taxpayer via certified mail or secure email if the taxpayer has given permission to receive correspondence from the Tax Division electronically, and/or an individual taxpayer may submit to the Tax Division a completed Hardship Payment Plan Request to request a payment plan on the unpaid balance.
(c) If there remains an unpaid balance after repeated mailings of the Monthly Statement, the taxpayer will receive a Monthly Statement-Final Notice. The taxpayer may request in writing within 30 days of the date of Monthly Statement-Final Notice an appealable Assessment of any balances due. The appealable Assessment will be sent to the taxpayer via certified mail or secure email if the taxpayer has given permission to receive correspondence from the Tax Division electronically and/or an individual taxpayer may submit to the Income Tax Division a completed Hardship Payment Plan request to request a payment plan on the unpaid balance. If the taxpayer does not request an appealable Assessment in writing within the 30-day period, the Tax Division will consider any balances final and the account will be subject to collection via a Clark County Municipal Court summons for a criminal misdemeanor, submission to a collection agency and/or a civil judgement.
(d) If the taxpayer requests an appealable Assessment within 30 days of the date of the Monthly Statement-Final Notice, the Tax Administrator will generate an Assessment and attempt delivery via the means described previously under Service of Assessment. Within 60 days of the Service of Assessment, the taxpayer may contact the Tax Administrator in writing to request a compromise on this Assessment or the taxpayer may submit an appeal to the Local Board of Tax Review. On the 61st day after the Assessment has been served, the Assessment is final and subject to collection.
(e) When any taxpayer subject to the provisions of the Ordinance has filed a return indicating the amount of tax due and has failed to pay said tax to the Income Tax Division as required by the Ordinance, the Administrator need not issue an Assessment but may proceed under the authority of Sections 881.09 and 881.10 of the Ordinance which are outlined in Article XIII of these Rules and Regulations.
(f) If a balance remains unpaid and the Assessment has become final and collectible the taxpayer is subject to additional legal actions to attempt collection including submission to a collection agency and/or civil actions and/or a summons to Clark County Municipal Court for a criminal misdemeanor.
I. Credits
(1) The City of New Carlisle does not allow credits for taxes paid to any other municipality to be used to offset taxes due to New Carlisle under the authority of Section 881.12 of the Ordinance.
(2) Qualifying losses on non-qualified deferred compensation plan are covered in ORC 718.021.